Purchase Plus Improvements program: turning dream homes into reality

Sometimes a house needs a few tweaks to turn it into a dream home. Maybe the kitchen is out-dated or perhaps the flooring needs to be replaced. But homebuyers who want to make renovations or repairs to their new home may not have the extra cash available after putting a down payment on a property.

Options include using a credit card or line of credit, or even cashing in investments. But that means paying off both a mortgage and a loan at the same time, one of which will likely have high interest or other penalties.

Genworth Canada can help qualified homebuyers make their new home just right with tailored improvements immediately after taking possession. The Purchase Plus Improvements program allows homebuyers to roll in the cost of improvements to the purchase price of the home.

“You might find the right home in the right neighbourhood, but it requires a few improvements to turn it into your dream home,” says Brian Kennedy, mortgage-planning specialist with Investors Group in Sudbury, Ont.

Kennedy, who has worked with Investors Group for 20 years and previously held various lending roles with Scotiabank and Royal Bank of Canada, is responsible for a territory that stretches from Parry Sound to Sault Ste. Marie. Last year he had more than 100 deals insured with Genworth Canada and, of those, 13 per cent were done as part of the Purchase Plus Improvements program.

“This program has been around at least 10 years but it’s not widely known,” says Kennedy, adding that he offers a full-hour session with first-time homebuyers to teach them about the program and what options are available to them.

If deficiencies are identified during the home inspection, “it allows a purchaser to renegotiate the purchase price downward and use the program to fix those deficiencies, such as repairing a roof,” he says.

Or, the structure may be sound but the homebuyer wants to make improvements, such as replacing the flooring, finishing the basement or renovating an out-dated kitchen or bathroom.

With the Purchase Plus Improvements program, they can make improvements immediately after taking possession of the purchased property, all with one mortgage and as little as five per cent down.

To do this, the homebuyer gets a quote from a contractor for the work required and supplies the quote to Kennedy, who then resubmits the application. Genworth Canada ensures the value is supported prior to closing the deal, and the money is held in trust until the lender validates the work is completed.

The lending value is based on the lesser of the improved property value or the sum of the purchase price plus direct costs of the improvements. Payments are based on the entire mortgage approved.

Homebuyers benefit because they pay the same rate for improvements as they do for the mortgage, says Kennedy. He’s a big fan of the program because it helps people buy the home they want, in the neighbourhood they want — and keeps them in it.

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